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SBA Loans

Are you planning to start a business or expand an existing business and do not qualify for a conventional bank loan? As an award-winning SBA Preferred lender, our experienced business development officers can help you discover loan programs designed for business owners who may have challenges qualifying for a conventional bank loan. Contact one of our experienced Business Development Officers today for a personal review of your plan and find the best loan to suit your needs.

The US SBA 504 Loan or Certified Development Company program is designed to provide financing for the purchase of fixed assets, which usually means real estate, buildings and machinery, at below market interest rates. The SBA 504 loan program works by distributing the loan among three parties. The business owner puts in a minimum of 10%, a conventional lender (typically a bank) puts in to 50%, and a so-called Certified Development Company (CDC) puts in the remaining 40%.

SBA 7(a) Loan

If you are awarded a SBA 7(a) loan, the loan proceeds may be used to establish a new business or to assist in the acquisition, operation, or expansion of an existing business.

The 7(a) Loan Program is the SBA’s primary program for helping start-up and existing small businesses, with financing guaranteed for a variety of general business purposes. The SBA does not make loans itself, but rather guarantees loans made by Consumers National Bank. In this way, taxpayer funds are only used in the event of borrower default. This reduces the risk to the lender but not to the borrower, who remains obligated for the full debt, even in the event of default.

A Certified Development Company (CDC) is a nonprofit corporation set up to contribute to the economic development of its community. CDCs are located nationwide and operate primarily in their state of incorporation (Area of Operation). CDCs work with the SBA and Consumers National Bank to provide financing to small businesses through the CDC/504 Loan Program, which provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings.

Typically, a 504 project includes:

A loan secured from a private sector lender with a senior lien covering up to 50 percent of the project cost

A loan secured from a CDC (backed by a 100 percent SBA-guaranteed debenture) with a junior lien covering up to 40 percent of the total cost